By Sruthi Shankar
(Reuters) – European shares headed towards a one-month high on Monday, with a rally in China’s markets setting an upbeat tone as investors banked on the world’s second biggest economy to lead a recovery from the coronavirus-induced slump.
The pan-European STOXX 600 <.stoxx> climbed 1.6%, as stocks exposed to China, including carmakers <.sxap>, industrials <.sxnp>, energy firms <.sxep> and luxury goods makers, gained strongly.
The German DAX <.gdaxi>, London’s FTSE 100 <.ftse> and France’s CAC 40 <.fchi> all rose about 2%.
China’s blue-chip index <.csi300> jumped over 5%, as investors stocked up on cheap funding to invest in an economy that analysts predict will recover faster and better than other major countries battling new waves of infections. [.SS]
“They (China) were the first to get hit by the virus, and that’s the sort of timeline that other economies in the world can expect for a bounce back,” said Michael Baker, an analyst at ETX Capital in London.
“The only concern is the United States. That’s a spanner in the works.”
In the first four days of July alone, 15 states have reported record increases in new cases of COVID-19, which has infected nearly 3 million Americans and killed about 130,000, according to a Reuters tally.
Optimism from Asia spilled over to European trading session, with HSBC
Europe’s battered banking index <.sx7p> jumped 4%, touching its highest level since June 10.
UK homebuilders Persimmon
Barratt said it was starting the new financial year with “cautious optimism” as its forward order book improved.
Sonova
Nordic banking group Nordea
Swiss speciality chemicals group Clariant
(Reporting by Sruthi Shankar in Bengaluru; editing by Patrick Graham and Sriraj Kalluvila)